Which of the Following Statements Is CORRECT,other Things Held Constant

question 27

Multiple Choice

Which of the following statements is CORRECT,other things held constant?

• A) If companies have fewer good investment opportunities,interest rates are likely to increase.
• B) If individuals increase their savings rate,interest rates are likely to increase.
• C) If expected inflation increases,interest rates are likely to increase.
• D) Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy,hence the riskiness of all debt securities.
• E) Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.

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Definitions:

Oil And Gas

Natural hydrocarbon resources found beneath the Earth's surface, often used as fuel and in various industrial processes.

Coal

A combustible black or brownish-black sedimentary rock, formed from ancient plant matter, used as a fossil fuel.

Oil Shale

A type of sedimentary rock that contains kerogen, a mix of organic compounds from which liquid hydrocarbons can be produced.

Energy Resource

Any natural or artificial substance or mechanism that can be used to produce energy or power.